IHS Markit Forecasts 1 GW PV For Italy In 2021

• IHS Markit sees Italy making efforts to ease its permitting and authorization processes for solar
• It would lead to Italy adding 1 GW PV capacity in 2021, which will grow to around 3.5 GW annually by 2025
• Small scale solar will however continue to drive installations before utility scale can take off

As Italian regime works to resolve the issues related to permitting and authorization procedures for utility scale PV projects, small scale solar is likely to continue to drive installations here in 2021 as well as 2022, with the IHS Markit forecasting it to add 1 GW of PV capacity in 2021. It should steadily grow to around 3.5 GW annually by 2025, leading to a total of 12 GW new PV capacity between 2021 and 2025.

For reference, the global market intelligence agency IHS Markit counts less than 1 MW systems in the residential and small and medium commercial facilities having accounted for more than 55% of its growth in 2021.

The highest annual addition Italy has ever reported so far was in 2011 when it added 6.7 GW the 'second-highest figure that year' across the world, majorly thanks to incentives as guaranteed minimum payments for all plants of 1 MW or above, which were phased out in 2014.

According to Josefin Berg, IHS Markit's Research and Analysis Manager, Energy & Power, things are slowly moving here as incentives are being reintroduced under newer policy frameworks. For instance, in the residential segment the government is offering a temporary income tax rebate worth 110% of the total installation cost for PV systems up to €2,400 per kW, and for storage systems it is €1,000 (see Italy's Tax Breaks To Support Rooftop PV).

For the small and medium commercial segment, the Decreto FER 1 program, created by the European Union (EU), there is €5.4 billion financing available for renewable energy installations, including for PV systems of at least 20 kW. While this works for small installations, it has failed to generate much interest at the utility scale projects of over 1 MW capacity.

"PV participation in FER tenders has been extremely low. In the first 5 rounds of the tenders, 208 MW of PV projects have been assigned, representing only 4.6% of the capacity available," according to Berg.

Things are changing though with the PV industry demanding further simplification with one voice (see European RE Bodies Call On Italy To Simplify Processes). Government's simplification decrees of 2020 and 2021 have led to the opening up of formerly ineligible sites as those of national interest and agricultural land, along with accelerated environmental reviews.

Berg believes starting from 2022, Italy will see unfreezing of a 'significantly large pipeline' of over 1 MW capacity as the country deals with incentivizing new installations and revamping or repowering older units.

According to Global Market Outlook for Solar Power 2021-2025 of SolarPower Europe (SPE), Italy's cumulative installed PV capacity till 2020 was 21.19 GW, and expects it to add 8.377 GW between 2021 and 2025 (see SPE: 163 GW Solar PV Capacity Addition Globally In 2021).